Chapter 0

First Things First

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 1

 Objectives
In this chapter you learn:
 Statistics is a way of thinking that can lead to better decisions.

 Statistics requires analytics skills and is an important part of

your business education.

 Recent developments such as the use of business analytics

and “big data” have made knowing statistics even more

critical.
 The DCOVA framework guides your application of statistics.

 The opportunity business analytics represent for business

students.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 2

In Today’s Business World You Need
To Think Differently About Statistics

 Modern-day information technology enables

businesses to apply statistics in new ways to
solve business problems utilizing:

 Vast amounts of summarized, unsummarized,

numerical, and non-numerical data (facts about the
world).

 Software to perform calculations.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 3

Statistics Are The Methods That Allow
People To Effectively Work With Data

 Business statistics provides a formal basis to:

 Summarize and visualize business data.

 Reach conclusions from business data.

 Make reliable predictions about business activities.

 Improve business processes.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 4

To Properly Apply Statistics You Should Follow A
Framework To Minimize Possible Errors
In this book we will use DCOVA

 Define the data you want to study to solve a

problem or meet an objective.
 Collect the data from appropriate sources.
 Organize the data collected by developing
tables.
 Visualize the data by developing charts.
 Analyze the data collected to reach
conclusions and present those results.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 5

 Statistics Is Evolving So Businesses Can
Use The Vast Amount Of Data Available

The emerging field of Business Analytics combines

methods from:

 Statistics (exploring & analyzing data).

 Information systems (collecting & processing data).
 Management science (optimization models).

to support fact-based decision making.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 6

 The Growth Of Big Data & Unstructured Data
Is Changing The Way We Work With Data

 Big Data is data that is collected:

 In huge volumes.
 At very fast rates or velocities.
 Typically in near real times.
 In a variety of forms.

 Unstructured Data:
 Has little or not repeating internal structure.
 Usually requires preprocessing prior to analysis.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 7

Operational Definition Of Some Terms
DCOVA
VARIABLE
A characteristic of an item or individual.

DATA
The set of individual values associated with one or
more variables.

STATISTIC
A value that summarizes the data of a particular
variable.
Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 8
Operational Definition Of Some Terms
DCOVA
Descriptive Statistics
The methods that primarily help summarize and
present data.

Inferential Statistics
Methods that use data collected from a small group to
reach conclusions about larger group.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 9

 Can Statistics Lie?

 Faulty or invalid statistics can be produced if

any tasks in the DCOVA framework are applied
incorrectly.

 Many statistical methods are valid only if the

data being analyzed have certain properties.

 For inferential methods you should always look

for logical causality.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 10

 How To Use This Book
 The Using Statistics scenario at the beginning and
end of each chapter provide:
 A real business situation that the chapter’s topics can help
address.
 Context which is an important part of the learning process.
 Downloadable example Excel worksheets are
provided throughout each chapter.
 Numerous case studies are provided so you can:
 Apply what you have learned.
 Enhance your analytical & communication skills.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 11

 Software and Statistics
 Software is used in statistics to assist you in
applying statistical methods.

 This book covers the use of Microsoft Excel ® --

Microsoft Office’s data analysis application.

 Downloadable example Excel worksheets are

provided throughout each chapter.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 12

 Microsoft Excel Is The Primary Data
Analysis Application In Microsoft Office
 Excel uses worksheets (spreadsheets) to both store
data and present analysis results.
 A worksheet has rows and columns.
 The intersection of a specific row and column is called a
cell and is where data is stored.
 Standard business practice is to store the data
associated with a variable in a column.
 Excel saves files that it calls workbooks.
 A workbook is a collection of worksheets and chart
sheets.
 An excel file is typically saved in an .xlsx or .xls format.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 13

 How Can I Use Excel With This Book
 Excel can be used to learn and apply the statistical
methods discussed in this book.
 Excel can be used by utilizing the Excel add-in PHStat:
 PHStat is available with an access code.
 PHStat simplifies the task of operating Excel.
 Excel can also be used via Excel Guide workbooks.
 Excel can also be used via Microsoft-supplied
ToolPak.
 The Excel Guides explain how to use each method.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 14

 Chapter Summary
In this chapter we have seen:
 Statistics is a way of thinking that can lead to better decisions.

 Statistics requires analytics skills and is an important part of

your business education.

 Recent developments such as the use of business analytics

and “big data” have made knowing statistics even more

critical.
 The DCOVA framework guides your application of statistics.

 The opportunity business analytics represent for business

students.

Copyright © 2017 Pearson Education, Ltd. Chapter 0 - 15